Cabinet approves changes in land title laws5 min read . Updated: 06 Jun 2013, 01:24 AM IST
Focus of amendments on transparency and digitization; move will also help in award of compensation
New Delhi: India’s cabinet has approved changes in titling law that will make ownership of land more transparent, in a move that could eventually make it easier for industrial projects to acquire land and also reduce the quantum of litigation related to the subject that is clogging up the country’s legal system.
On Tuesday, the cabinet approved for introduction in Parliament key amendments to the Registration Act, 1908, which governs the registration of documents and sales transactions for both movable and immovable property within the country.
“The proposed amendments ensure that the process of registration becomes more transparent and the information available to the public at large is more detailed and accurate," a statement from the rural development ministry said.
The main focus of the amendments is on transparency and digitization that will help establish land ownership, which, in India, is a complex issue given the lack of documentation and the absence of contemporary land records.
The difficulty of acquiring land is a significant deterrent to investments, especially in infrastructure.
Several industrial and infrastructure projects, including Posco’s $12 billion steel plant in Orissa, have been delayed for years—eight in the case of the South Korean company—on this count. There are 69 infrastructure projects that are facing time and cost over-runs due to land acquisition problems, according to data posted on the website of the ministry of statistics and programme implementation.
The amendments, if legislated, could also help combat, to some extent, the prevalence of so-called black (or unaccounted) money in any land transaction, said a real estate consultant.
That’s because the process means “benchmarks for land prices" will be established “since the last transaction price for a property will be known", said Santhosh Kumar, chief executive officer (operations) at Jones Lang LaSalle India. And digitization will ensure faster trasactions, he added.
The process will also mean fewer cases, said a lawyer.
It could “potentially reduce the amount of land (related) litigation", said Saroj Kumar Jha, partner at SRGR Law Offices in New Delhi, although it wouldn’t “eradicate" them. Almost 70-80% of land cases are on “title issues", he added.
The proposed changes “will ensure greater accuracy in helping identify or determine beneficiaries" through clear titles if and when their land is bought or sold or acquired, the rural development ministry’s statement said.
To increase transparency in the management of records and to ensure clarity of title, “records are being made more accessible by all. Previously, accessing records was limited to only those parties engaging in a transaction over the property", the statement said.
The amendments allow the land registration office to accept documents digitally and register them online. This will “ensure that digitization of records takes place so that all documents may be accessed at any given point of time and discrepancies may be corrected expeditiously", the statement said.
The 1908 Act provides for the registration of deeds of sale or gift of land, houses or other real property, deeds of mortgage on land, houses and other real property, leases and limited assignments of land, houses and other real property and wills.
According to urban planner Swati Ramanathan, co-founder of non-profit organization Janaagraha Centre for Citizenship and Democracy and an expert on titling issues, the sale deed merely records the transaction and gives no guarantee of whether the seller actually had the authority to sell the land or not.
“There is no record of who actually owns the land. If there is a dispute, the registration department has no responsibility. The sale deed is indicative of presumptive ownership only," she said, adding the deed is only a “fiscal instrument for the state to collect a fee without (the owner) having statutory support of certainty to title".
“I am so glad that the fundamental base plate, the guaranteed title certificate" has been finally recognized by the government, Ramanathan said. The guaranteed title certificate will also help people who want to use land as a credit generation instrument, she said. With India urbanizing so rapidly, “this is a critical aspect of market economy" that needs to be addressed, she added.
Indeed, unclear titles are one reason why developers of industrial projects insist that the government acquire land and then transfer it to them (the government acquisition sanctifies titles)—a process that has caused much political heart-burn and engendered several controversies.
Still, implementing the proposals wouldn’t be easy, said another real estate adviser.
Hardeep Lamba, associate vice-president (land and industrial agency) at Jones Lang LaSalle India, said the proposals are “very, very ambitious" given the vast quantity of documentation that needs to be digitized.
“Very few states have been successful in converting paper records into data. Andhra Pradesh is one state where this has been done to a great extent. It is a mammoth task and the physical state of the paper records in many cases is so bad that they cannot even be scanned because they are so old," he said.
“Having said that, this is a good first step," Lamba added.
According to the rural development ministry’s note, the changes to the 1908 Act will also help in the award of compensation under the proposed Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Bill, 2012, pending before Parliament.
To calculate the compensation amount, “the formula relies on the current market values in place, i.e., the registered value. Registered values are notoriously opaque and often outdated. Furthermore, because of the unprofessional and ad hoc way in which they are recorded, land titles are often subject to dispute. These new amendments to the Registration Act will ensure greater accuracy in helping identify/determine beneficiaries—through clear titles," the note said.
Among the changes proposed last year by the department of land resources under the ministry of rural development were the redefinition of leases to make mandatory the registration of even those less than one year, the compulsory registration of power of attorney to plug revenue leakages, the amendment of an adoption clause to include daughters, and the use of unique identity, or Aadhaar numbers, and the computerization of registration documents.
In a statement to Parliament last year, rural development minister Jairam Ramesh pointed out that the land survey records in different parts of the country are still archaic.
“India is one of the few countries in the world where the record of rights on land is presumptive; it is not conclusive unlike many other countries. We are presumed to be owners of land unless proved otherwise. That is why we have lots of disputes and lots of problems in land acquisition," the minister said.
Ramesh also said the government was aggressively moving towards conclusive titles.
“But before we do that, we need to date our land records. We need to make them online and we must ensure that survey of the land records is up-to-date," he said.